Cheaper oil & falling demand dropped BP’s profit

BP’s second quarter profits have more than halves continued to suffer from a weak oil price and falling demand for energy.

BP reported profits of $3.14bn (£1.9bn) for the three months to the end of June, 53% less than for the same period last year.

Tony Hayward, Chief Executive, said BP expected the “recovery to be long and drawn out” after reporting it made $3.14 billion in second quarter, down from $6.74 billion during the same period last year. That means 53 percent decrease.

BP produced 4 percent more oil during the three months to the end of this June than the same period last year, but dramatic fall in price has savage its bottom line.

Last July, oil price had reached the highest price as ever before at $147 a barrel. And now it’s near to reach $70.

“We are in turbulent times, volatile and uncertain. But we continue to steer a steady course through choppy waters,” said Hayward.

However, he said BP was delivering good performance in a tough environment.

“We have already surpassed the target we set ourselves at the beginning of this year for cash costs but we are by no means complacent. We will continue to push efficiencies into the group and make sure every dollar counts,” Hayward said.

It had already reduced cash costs for 2009 by $2 billion and was expecting to save another $1 billion in the second half of the year, Hayward said.